At Texas warehouse, Amazon delivery ambitions on display

By Sebastian Herrera sherrera@statesman.com

Thursday

May 16, 2019 at 4:26 PMMay 16, 2019 at 4:36 PM

Inside Amazon’s 855,000-square-foot warehouse in San Marcos, Texas, just south of Austin, man and machine work together daily to fulfill the millions of customer orders they’re responsible for each year. Beyond secured doors and metal detectors, employees assemble packages using ever-evolving machinery and sorting technology.

Amazon has built itself into a $900 billion company, largely through this flagship service: fast delivery.

Now, it’s aiming to fulfill orders at an even speedier pace, saying earlier this month that it is investing $800 million to make one-day delivery possible for Amazon Prime members. Amazon’s network of warehouses — including the one in San Marcos — will be responsible for achieving the objective.

Groundwork to meet the ambitious goal already is being laid at the facility.

“Fulfillment is the core business that Amazon started with,” said Eli Pabon, general manager at the San Marcos warehouse. “We’ve grown as a company over time and really expanded to become a very broad business, but customer fulfillment ... still absolutely is the core of our business.”

In 2016, Amazon opted to build the warehouse in San Marcos in exchange for an $11 million tax-incentives package from Hays County and the city of San Marcos that required the online retailer to create and maintain at least 350 permanent full-time jobs.

Today, the facility has more than 1,500 full-time workers — making it the city’s second-largest employer behind Texas State University. At peak demand times, the warehouse can employ around 2,000 people.

Amazon has opened more than 75 warehouses in North America, employing more than 125,000 full-time workers combined. Its San Marcos center is one of more than 20 to feature a robotic fulfillment process, according to Pabon.

Inside the San Marcos center, robotic devices underneath specialized product shelves transport the shelves into sorting positions — zooming past each other, pivoting and zigzagging their way to employees.

Workers then take the products out of the shelves and place them into yellow bins that move along a conveyor belt to the packaging department. Eventually, artificial intelligence technology sorts packages to corresponding delivery trucks. The San Marcos center mostly mails out smaller items, such as books or handheld electronic devices.

Since Amazon opened in San Marcos three years ago, the e-commerce giant’s presence has boosted housing and business growth around the fulfillment facility, San Marcos Chamber of Commerce spokeswoman Samantha Brown said. The company has also invested thousands of dollars in local education programs focused on robotics and hosted robotics camps for students.

“When you have an anchor like Amazon, other businesses look at your community,” Brown said.

While Amazon’s impact in San Marcos has grown during the past three years, so have the ambitions of its competitors. Walmart, Target and other blue chip firms have sought to eat away at Amazon’s dominance by offering their own quick delivery and slate of online products and services.

Still, Amazon has continued to push the boundaries in terms of speed.

Updated technology is expected to be installed at the San Marcos facility soon, a company spokeswoman said, although Amazon hasn’t said if hiring at the warehouse will increase because of the new one-day delivery initiative.

The company’s business strategy “is focused on meeting customer demand, and that includes hiring,” the spokeswoman said.

Amazon’s rapid-paced culture, however, has been the subject of employee scrutiny, with workers throughout the years highlighting in media reports experiences of working through bathroom breaks, being under constant surveillance and having unrealistic quotas to fill.

Even after Amazon in October raised minimum wage for all U.S.-based employees to $15 per hour, some staff members said certain bonuses or stock grants were cut.

While warehouse employees are required to meet performance goals, the company also inserted procedures that allow the concerns of employees to be addressed, according to Terasita Lazaga, who has worked as an associate at the San Marcos center for the past 18 months.

“It is fast-paced, but ... at the beginning of our shift and after our first break, the safety standards are always talked about,” Lazaga said. “The standards are there.”

Amazon this year is planning to start a new benefit program for associates, Pabon said. The initiative could answer concerns workers have of being left out of Amazon stock grants or not immediately seeing a profit when the company’s value rises. Average salary at the San Marcos center now ranges from $15 to $17.80, depending on experience, according to Amazon.

In February, the San Marcos warehouse became one of 23 fulfillment centers in North America open for public tours. Amazon began offering warehouse tours years ago to let shoppers and other members of the public see the operation for themselves.

If any local customer is worried about how Amazon fulfills orders, Pabon said, they now have an option.

“Come see it,” he said. “If you want to know what goes on here, I encourage anyone who wants to learn about this place to come see it. We’d love to have you.”

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.